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Boeing Gets Army Contract - Analyst Blog

The Boeing Company
(
BA
) was awarded a $59.6 million firm-fixed-price contract by the
U.S. Army Contracting Command, Redstone Arsenal, Alabama. The
award will provide for the modification of an existing contract.
It exercises option year two on the Performance Based Logistics
contract. The scope of the contract involves the Army aviation
missile command material/labor for service of the Apache D Unique
components. Since 2001 Boeing has supplied over 1,800 types of D
unique components for Apache units. Work on the contract will be
performed in Mesa. The company expects to finish work by an
estimated completion date of October 31, 2013.

Boeing enjoys a unique position as the largest aircraft
manufacturer in the world in terms of revenues, orders and
deliveries, and is also one of the largest aerospace and defense
contractors. Besides, its revenues are spread across more than 90
countries around the globe.

Boeing taking into account its performance in the first nine
months of 2012, raised its full year 2012 earnings per share
guidance to a range of $4.80-$4.95 from its earlier guidance
range of $4.40-$4.60. The company also raised its revenue
guidance for 2012 to the range of $80.5 billion to $82 billion
versus the earlier range of $79.5 billion to $81.5 billion.

The company expects its Commercial Airplanes' 2012 deliveries to
come between 585 and 600 airplanes, which are already sold out.
This includes an expected 70 to 85 787 and 747-8 deliveries.
Commercial Airplanes' 2012 revenue is expected to be between
$47.5 billion and $49.5 billion with operating margin around
9.0%.

In the defense space, the company expects defense revenue for
2012 to be between $32.5 billion and $33.0 billion versus its
earlier range of $31.5 billion and $32.0 billion with operating
margin greater than 9%. Boeing Capital Corporation expects that
its aircraft finance portfolio will continue to decline in 2012.

Boeing currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating. Considering the fundamentals, we are
maintaining our Neutral recommendation on the stock. This is in
sync with other aerospace and defense behemoths,
General Dynamics Corporation
(
GD
) and
Lockheed Martin Corporation
(
LMT
).

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